INVESTMENT INCENTIVES

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THE FRAMEWORK OF INVESTMENT INCENTIVES PROGRAM IN TURKEY

 

 


The investment incentives program, which will be effective from the 1st January 2012 comprises 4 different schemes:
1- General Investment Incentive Scheme 2- Regional Investment Incentive Scheme 3- Priority Investment Incentive Scheme 4- Strategic Investment Incentive Scheme
The support measures to be provided within the frame of those schemes are summarized in the table below:

  Support Measures General Investment Incentive Scheme Regional Investment Incentive Scheme Priority Investment Incentive Scheme Strategic Investment Incentive Scheme
VAT Exemption + + + +
Customs Duty Exemption + + + +
Tax Deduction   + + +
Social Security Premium Support (Employer’s Share)   + + +
Income Tax Withholding Support * + + + +
Social Security Premium Support (Employee’s Share) *   + + +
Interest/Profit Share Support **   + + +
Land Allocation   + + +
VAT Refund***       +

* Provided that the investment is made in the Region 6 and the strategic investments supported within the Technology Focused Industry Movement Program (TFIMP).
** Provided that the investment is made in the Regions 3, 4, 5 or 6 within the frame of the Regional Investment Incentive Scheme.
*** For Strategic Investments with a minimum fixed investment amount of 500 million TL. Building- construction expenditures for all investments with incentive certificates to be made in the manufacturing sector in 2017-2021 can also benefit from VAT refund.

 

THE SUPPORT MEASURES

VAT Exemption:
In accordance with the measure, VAT is not paid for imported and/or locally provided investment machinery and equipment as well as selling and renting of intangible rights and software within the scope of the investment encouragement certificate.

Customs Duty Exemption:
Customs duty is not paid for the machinery and equipment provided from abroad (imported) within the scope of the investment incentive certificate.

Tax Deduction:
Calculation of income or corporate tax with reduced rates until the total value reaches to the amount of contribution to the investment according to envisaged rate of contribution.

Social Security Premium Support (Employer’s Share):
The measure stipulates that for the additional employment created by the investment, employer’s share of social security premium on portions of labor wages corresponding to amount of legal minimum wage, will be covered by the Ministry.

Income Tax Withholding Allowance:
The measure stipulates that the income tax regarding the additional employment generated by the investment within the scope of the investment encouragement certificate will not be liable to withholding. The measure is applicable only for the investments to be made in Region 6 and the strategic investments supported under the TFIMP within the scope of an investment incentive certificate.

Social Security Premium Support (Employee’s Share):
The measure stipulates that for the additional employment created by the investment, employee’s share of social security premium on portions of labor wages corresponding to amount of legal minimum wage, will be covered by the Ministry. The measure is applicable only for the investments to be made in Region 6 and the strategic investments supported under the TFIMP within the scope of an investment incentive certificate.

Interest/Profit Share Support:
Interest/Profit share support, is a financial support instrument, provided for the loans with a term of at least one year obtained within the frame of the investment encouragement certificate. The measure stipulates that a certain portion of the interest/profit share regarding the loan equivalent of at most 70% of the fixed investment amount registered in the certificate will be covered by the Ministry.

Land Allocation:
Refers to allocation of land to the investments with Investment Incentive Certificates, if any in that province in accordance with the rules and principles determined by the Ministry of Finance.

VAT Refund:1

For 2017-2021, VAT collected on the building & construction expenses of manufacturing sector investments with incentive certificate will be rebated.

VAT collected on the building & construction expenses made within the frame of strategic investments with a fixed investment amount of 500 million TL will be rebated.
Effective until 31 December 2020, the following Regional Map and Table of Provinces show classification of provinces for the implementation purpose of the Investment Incentives

 

Region 1 Provinces Region 2 Provinces Region 3 Provinces Region 4 Provinces Region 5 Provinces Region 6 Provinces
Ankara Adana  Balıkesir     Afyonkarahisar  Adıyaman          Ağrı
Antalya Aydın  Bilecik        Amasya  Aksaray             Ardahan
Bursa Bolu  Burdur        Artvin  Bayburt             Batman
Eskişehir Çanakkale  Gaziantep Bartın  Çankırı               Bingöl
İstanbul Denizli  Karabük     Çorum  Erzurum             Bitlis
İzmir Edirne  Karaman     Düzce  Giresun              Diyarbakır
Kocaeli Isparta  Manisa        Elazığ  Gümüşhane       Hakkâri
Muğla Kayseri  Mersin        Erzincan  Kahramanmaraş Iğdır
  Kırklareli  Samsun       Hatay  Kilis                   Kars
  Konya  Trabzon      Kastamonu  Niğde                Mardin
  Sakarya  Uşak           Kırıkkale  Ordu                  Muş
  Tekirdağ  Zonguldak Kırşehir  Osmaniye          Siirt
  Yalova   Kütahya  Sinop                 Şanlıurfa
      Malatya  Tokat                 Şırnak
      Nevşehir  Tunceli               Van
      Rize  Yozgat                
      Sivas    
8 PROVINCES 13 PROVINCES 12 PROVINCES 17 PROVINCES 16 PROVINCES 15 PROVINCES

 

Effective from 1 January 2021, the following Regional Map and Table of Provinces show classification of provinces for the implementation purpose of the Investment Incentives Program

 

Region 1 Provinces Region 2 Provinces Region 3 Provinces Region 4 Provinces Region 5 Provinces Region 6 Provinces
Ankara Aydın Adana Afyonkarahisar  Bayburt                      Adıyaman
Antalya Balıkesir Burdur Aksaray  Çankırı                       Ağrı
Bursa Bilecik Düzce Amasya  Erzurum                     Ardahan
Eskişehir Bolu Gaziantep Artvin  Giresun                      Batman
İstanbul Çanakkale Karaman Bartın  Gümüşhane                Bingöl
İzmir Denizli Kırıkkale Çorum  Kahramanmaraş         Bitlis
Kocaeli Edirne Kütahya Elâzığ  Kilis                           Diyarbakır
Muğla Isparta Mersin Erzincan  Niğde                         Hakkâri
Tekirdağ Karabük Samsun Hatay  Ordu                          Iğdır
  Kayseri Trabzon Kastamonu  Osmaniye                   Kars
  Kırklareli Rize Kırşehir  Sinop                          Mardin
  Konya Uşak Malatya  Tokat                          Muş
  Manisa Zonguldak Nevşehir  Tunceli                       Siirt
  Sakarya   Sivas  Yozgat                       Şanlıurfa
  Yalova       Şırnak
          Van
           
9 PROVINCES 15 PROVINCES 13 PROVINCES 14 PROVINCES 14 PROVINCES 16 PROVINCES

GENERAL INVESTMENT INCENTIVES SCHEME

Regardless of in which Region an investment is made all projects which meet conditions of specific capacity and the following minimum fixed investment amount will be supported within the frame of the General Investment Incentives Scheme. Investment subjects which are excluded from the investment incentives program can not benefit from this scheme.

The amount of minimum fixed investment is 1 million TL in Region 1 and 2 and 500 thousand TL in Regions 3, 4, 5 and 6.

REGIONAL INVESTMENT INCENTIVES SCHEME

The sectors to be supported in each province are determined in accordance with potentials of the provinces and the economies of scale and the intensity of the supports are differentiated in line with the development level of the regions.

The amount of minimum fixed investment is defined separately for each sector and each region, the lowest amount being 1 million TL in Regions 1 and 2, and 500 thousand TL in the remaining Regions.

The terms and rates of supports within the Regional Investment Incentives Scheme are summarized in the Table below:

REGIONAL INVESTMENTS INCENTIVE SCHEME MEASURES

INCENTIVE MEASURES REGIONS
  I II III IV V VI
VAT Exemption YES YES YES YES YES YES
Customs Duty Exemption YES YES YES YES YES YES
  Tax Deduction* Rate of Contribution to      Investment* (%) Out of OIZ or IZ   15   20   25   30   40   50
Within OIZ or IZ   20   25   30   40   50   55
  Social Security Premium Support (Employer’s Share)**   Support Period Out of OIZ or IZ   2 years   3 years   5 years   6 years   7 years   10 years
Within OIZ or IZ   3 years   5 years   6 years   7 years   10 years   12 years
Land Allocation YES YES YES YES YES YES
  Interest/ Profit Share Support Local Loans     3 Points 4 Points 5 Points 7 Points
Foreign Exchange/ FX denominated loans 1 Point 1 Point 2 Points 2 Points
Social Security Premium Support (Employee’s Share) 10 years
Income Tax Withholding Support 10 years
                   

OIZ: Organized Industrial Zones

IZ: Manufacturing Investments in Specialized Industrial Zones

*Within the scope of incentive certificates issued for manufacturing sector (US-97 Code: 15-37); Rate of contribution to investment for each region shall get 15 points additionaly and tax deduction rate for each region shall be applied as 100 per cent for the investment expenditures that would be realized between the dates of 1/1/2017 and 31/12/2022.

** If requested during the application phase regarding the issuance of incentive certificates, the ratio of the support to the fixed investment amount is increased by half of the investment contribution rate, provided that the tax reduction is not utilized.

PRIORITY INVESTMENTS INCENTIVE SCHEME

The following investment subjects have been designated as priority investments within the framework of our country’s requirements and these investments are supported by measures of Region 5 even if they are made in Regions 1, 2, 3 and 4.

  • Tourism investments in Cultural and Touristic Preservation and Development Regions and thermal tourism investments,
  • Mining investments,
  • Railroad, maritime and airline transportation investments,
  • Defense industry investments,
  • Test center investments for products in the medium-high and high-tech industry class according to the technology density definition of the Organization for Economic Cooperation and Development (OECD).Nursery, Preschool, Primary, Middle and High School and education investments for the use, repair and maintenance of air vehicles
  • Investments made to manufacture the products and parts designed and developed as an outcome of the R&D Projects supported by the Ministry of Science, Industry and Technology, TUBITAK and KOSGEB,
  • Motorized land vehicles key industry investments with a minimum investment amount of 300 million TL, automotive engine manufacturing investments with a minimum amount of 75 million TL and transmission components/parts and automotive electronics manufacturing investments,
  • Investments made to generate electricity from coal,
  • Investments made to generate electricity through waste heat recovery in a facility,
  • Energy efficiency investments made in existing manufacturing facilities,
  • Liquefied natural gas (LNG) investments and underground gas storage investments with a minimum amount of 50 million TL,
  • Investments of carbon fiber or the composite materials made from carbon fiber provided that along with carbon fiber production.
  • Investments made to manufacture high-technology products classified according to OECD technology intensive definition.
  • Investments made to explore mines in the permitted fields for the investors holding Mining License and Certificate.
  • Investments made to manufacture turbines and generators for renewable energy and wind turbine wings for wind power.
  • Integrated investments for aluminium flat products using direct chill slab casting and hot rolling methods.
  • Licensed warehousing investments.
  • Nuclear power plant investments.
  • Qualified laboratory investments
  • Greenhouse investments based on automation with a minimum of 5 million TL, 25 decares and domestic spare parts
  • Investments subject to Environmental License within the scope of Environmental Permit and License Regulation. Elderly and Disabled care centers and wellness investments
  • Medium-high technology investments amounting to a minimum 500 million TL
  • Investments in the production of software and information products to be made in specialized free zones without requiring a minimum investment amount.

PRIORITY INVESTMENTS INCENTIVE SCHEME MEASURES

  INCENTIVE MEASURES Terms and Rates of Supports*
VAT Exemption YES
Customs Duty Exemption YES
  Tax Deduction Rate of Contribution to Investment (%) 40**
Tax Deduciton (%) 80**
Social Security Premium Support (Employer’s Share) 7 years
Land Allocation YES
  Interest/ Profit Share Support Local Loans 5 points
Foreign Exchange/ FX denominated loans 2 points
  • Supports of Region 5 for the Investments that are made in Regions 1-5; Supports of Region 6 for the Investments that are made in Region 6

**Within the scope of incentive certificates issued for manufacturing sector (US-97 Code: 15-37); Rate of contribution to investment shall get 15 points additionaly and tax deduction rate shall be applied as 100 per cent for the investment expenditures that would be realized between the dates of 1/1/2017 and 31/12/2022.

STRATEGIC INVESTMENT INCENTIVE SCHEME

The Goals:

  • On the basis of the “Input Supply Strategy”, this scheme aims at supporting  production of intermediate and final products with high import dependence with a view to reduce current account deficit.
  • It also targets encouraging high-tech and high value added investments with a potential of strengthening Turkey’s international competitiveness.

Investments meeting the criteria below are supported within the frame of the Strategic Investment Incentive Scheme:

  • to be made for production of intermediate and final goods with high import dependence of which more than 50% of these goods are supplied by imports,
    • to have a minimum investment amount of 50 million TL,
    • to create minimum 40% value added (This condition is not applicable to refined petroleum production investments and petrochemicals production investments),
    • to have an import amount of at least $50 million for goods to be produced in the last one year period (This condition is not applicable to goods with no domestic production)

The investments approved by the Ministry within the Technology Focused Industry Movement Program (TFIMP) also be supported within the context of strategic investments.

STRATEGIC INVESTMENTS INCENTIVE SCHEME MEASURES

INCENTIVE MEASURES REGIONS
I II III IV V VI
VAT Exemption YES
Customs Duty Exemption YES
  Tax Deduction* Rate of Contribution to Investment* (%)   50
Social Security Premium Support (Employer’s Share)   Support Period   7 Years (10 years for 6th region)
Land Allocation YES
  Interest/Profit Share Support   Local Loans 5 points (under the TFIMP 10 points for high-tech products, 8 points for others)
Foreign Exchange/ FX denominated loans   2 points
Social Security Premium Support (Employee’s Share) 10 years (only for investments in the Region 6 and strategic investments supported under TFIMP)
  Income Tax Withholding Support ** 10 years (only for investments in the Region 6 and in other regions under the TFIMP: 7 years in high-tech products, others for 5 years)
  VAT Refund YES (only for the expenditures of building for investments over 500 million TL)

*Within the scope of incentive certificates issued for manufacturing sector (US-97 Code: 15-37); Rate of contribution to investment shall get 15 points additionaly and tax deduction rate shall be applied as 100 per cent for the investment expenditures that would be realized between the dates of 1/1/2017 and 31/12/2022.

**Strategically supported investments under TFIMP, if the product is high-tech, it can be applied for a maximum of 500 employees and for others up to 300 employees.

SUB-REGIONAL INCENTIVES

Following investments will benefit from more beneficial sub-regional rates and terms for Tax Deduction and support to employer’s share of social security premium in any region:

  • Investments in Organized Industrial Zones and Manufacturing Investments in Specialized Industrial Zones,
  • Joint Investments by multiple (at least 5) companies operating in the same sector which establish integration to their activities.
  • Selected medium-high-technology industries will benefit from terms and rates of the support measures of Region 4 even if they are made in Regions 1 (except Istanbul), 2, 3. However, in the organized industrial zones or industrial zones in Istanbul Province, the regional supports in the 1st region are applied to the investments amounting to a minimum of 5 million TL, excluding completely new investments.
  • Investments to be made in the districts of the provinces of the 1st, 2nd, 3rd and 4th regions included in Annex-7 of the Decision;
  • From the regional supports provided to the sub-region of the province where the district is located;
    • Investments to be made in the OIZ / EZ of these districts benefit from the regional supports provided to the two sub-regions of the province where they are located.
  • 5 th region provinces;
  • Regional supports provided to the 6th region for the investments to be made in the districts included in ANNEX-7,
    • For the investments to be made in the OIZ / EZ of these districts, Social Security Premium Support (Employee’s Share), is applied by adding two years to the period valid in the 6th region; tax deduction support is applied by adding five points to the investment contribution rate valid in 6th region.
  • Within the scope of these applications, income tax withholding support and Social Security Premium Support (Employee’s Share) are not applied.
  • Effective from January 1, 2021, supplement to the Decision for the districts that will benefit from sub-regional supports, ANNEX-7:
  Ankara Çamlıdere
Bala
Haymana
    Adana Yumurtalık
İmamoğlu
Karataş
Karaisalı
Tufanbeyli
  Aladağ
Feke
Saimbeyli
      Afyonkarahisar Kızılören
İhsaniye
Bayat
Sinanpaşa
Hocalar
Çobanlar
      Aksaray Ortaköy
Sarıyahşi
Eskil
Ağaçören
Güzelyurt
Gülağaç
Amasya Göynücek
Hamamözü
Antalya Gündoğmuş
            Aydın Kuyucak
Germencik
Karacasu
Sultanhisar
Köşk
Buharkent
Yenipazar
İncirliova
Bozdoğan
Koçarlı
Karpuzlu
      Balıkesir Savaştepe
Dursunbey
Sındırgı
Havran
Kepsut
İvrindi
Balya
Bartın Kurucaşile
  Bilecik Gölpazarı
İnhisar
Yenipazar
Bolu Yeniçağa
  Mudurnu
Göynük
Seben
Kıbrısçık
Dörtdivan
      Burdur Kemer
Ağlasun
Cavdır
Çeltikçi
Yeşilova
Altınyayla
  Bursa Harmancık
Keles
Büyükorhan
Çanakkale Bayramiç
Yenice
Çankırı Bayramören
      Çorum Ortaköy
Boğazkale
Uğurludağ
Mecitözü
Bayat
Laçin
      Denizli Babadağ
Kale
Beyağaç
Baklan
Güney
Çameli
    Düzce Çilimli
Kaynaşlı
Cumayeri
Gölyaka
Yığılca
  Edirne Enez
İpsala
Meriç
Lalapaşa
  Elazığ Kovancılar
Karakocan
Alacakaya
  Maden
Palu
Baskil
Sivrice
Arıcak
  Erzincan Otlukbeli
Tercan
Çayırlı
        Erzurum Horasan
Hınıs
Şenkaya
Çat
Köprüköy
Tekman
Karaçoban
Karayazı
  Eskişehir Alpu
Günyüzü
Han
      Gaziantep Nizip
İslahiye
Oğuzeli
Nurdağı
Karkamış
Araban
Yavuzeli
      Hatay Arsuz
Reyhanlı
Yayladağı
Hassa
Kumlu
Altınözü
  Isparta Şarkikaraağaç
Aksu
Gelendost
Sütçüler
  İzmir Bayındır
Beydağ
Kiraz
Karabük Eskipazar
Yenice
  Ovacık
Eflani
  Karaman Kazımkarabekir
Başyayla
Sarıveliler
Ayrancı
        Kastamonu Daday
Cide
İhsangazi
Hanönü
Azdavay
Pınarbaşı
Şenpazar
Doğanyurt
          Kayseri İncesu
Felahiye
Yahyalı
Bunyan
Yeşilhisar
Pınarbaşı
Sarıoğlan
Tomarza
Sarız
Akkışla
      Kırıkkale Karakeçili
Delice
Keskin
Sulakyurt
Balışeyh
Celebi
  Kırklareli Demirköy
Pehlivanköy
Kofçaz
  Kırşehir Akpınar
Çiçekdağı
Boztepe
Akçakent
Kilis Musabeyli
Polateli
Konya Kulu
Sarayönü
  Hadim
Taşkent
Güneysınır
Hüyük
Kadınhanı
Doğanhisar
Tuzlukçu
Yalıhüyük
Bozkır
Derebucak
Altınekin
Çeltik
Yunak
Derbent
Halkapınar
Emirgazi
Ahırlı
        Kütahya Domaniç
Hisarcık
Şaphane
Pazarlar
Dumlupınar
Altıntaş
Çavdarhisar
Aslanapa
        Malatya Hekimhan
Doğanşehir
Akçadağ
Yazıhan
Doğanyol
Arguvan
Kuluncak
Kale
Pütürge
    Manisa Saruhanlı
Köprübaşı
Ahmetli
Gölmarmara
Selendi
Mersin Aydıncık
Mut
  Gülnar
Muğla Seydikemer
Nevşehir Derinkuyu
Acıgöl
Niğde Altunhisar
Çiftlik
Osmaniye Sumbas
      Rize Hemşin
Güneysu
İyidere
Derepazarı
İkizdere
Kalkandere
Çamlıhemşin
  Sakarya Kaynarca
Ferizli
Karapürçek
Taraklı
        Samsun Kavak
Havza
Alacam
Yakakent
Vezirköprü
Salıpazarı
Asarcık
Ayvacık
Sinop Dikmen
        Sivas Akıncılar
Zara
Gölova
Kangal
Ulaş
Altınyayla
Hafik
Yıldızeli
Koyulhisar
    Trabzon Çarşıbaşı
Araklı
Şalpazarı
Dernekpazarı
Tonya
  Köprübaşı
Hayrat
Düzköy
  Uşak Banaz
Karahallı
Sivaslı
Yozgat Aydıncık
Zonguldak Kilimli
Gökçebey

 

BAŞLAT
1
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Merhaba.
Size nasıl yardımcı olabiliriz.
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